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Cisco Systems, Inc's Third Quarter Was a Head-Scratcher

Just after the closing bell this afternoon, Cisco Systemsreported results for the third quarter of fiscal year 2015. The network hardware veteran edged past Wall Street's earnings estimates, but investors didn't take kindly to the report.

Cisco saw third-quarter revenue rising 5% year over year, landing right in line with analyst targets at $12.1 billion. On the bottom line, non-GAAP earnings increased by 6%, to $0.54 per diluted share. The sales performance fell at the top end of management's guidance from three months ago, and earnings landed above the official guidance range.

"Cisco is in a very strong position and we delivered another solid quarter," said Cisco CEO John Chambers in a press statement. "Our vision and strategy are working and we are executing very well in a tough environment, as evidenced in our revenue growth, profitability, strong gross margins and cash generation."

Free cash flows decreased by 5% year over year. Cisco used $1.0 billion of this $2.6 billion cash supply on share buybacks, retiring about 35 million shares from the open market. Another $1.1 billion fueled Cisco's quarterly dividend of $0.21 per share. Still, the company's cash reserves grew by $1.4 billion during the quarter, and now stand at a total of $54.4 billion.

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Cisco's share price bounced both higher and lower on the news, as investors struggled to make heads or tails out of the report. The report was light on detail regarding business drivers during the quarter. Management is likely to provide more clarity in the analyst call, including guidance for the year-ending quarter currently in progress.